SUBJECT:

Jan Donsbach,

Petitioner,

Social Security Administration.

DECISION

Jan Donsbach, Petitioner, filed a request for a hearing to contest the validity of a $13,454.33 salary overpayment debt the Social Security Administration (SSA) determined he owed. The records indicate that due to an administrative error, no deductions were made from Petitioner's salary to cover his share of his health benefits costs from the twenty-third pay period of 1995 through the eighth pay period of 2004. After considering the entire record, I find that Petitioner received $13, 454.33 in overpayments from SSA for this period and that SSA is entitled to recover these funds. ⁽¹⁾

Background

This case was received by the Departmental Appeals Board on October 13, 2006 and assigned to me for hearing pursuant to 5 U.S.C. � 5514. ⁽²⁾ I held a hearing conference by telephone with Petitioner and counsel for SSA on November 15, 2006. I tried to schedule the call earlier, but Petitioner was out of the country until November 12, 2006. The record before me includes Petitioner's three-page hearing request, the September 29, 2006 letter from SSA to Petitioner denying his request for waiver, and Petitioner's 37-page submission, faxed to me on November 13, 2006. I have reviewed the submissions and the parties' responses during the conference, and I do not find any material facts in dispute.

In October 1995, Petitioner accepted a position as an Administrative Law Judge at SSA. He transferred to SSA from the Department of Veteran's Affairs. At that time, SSA advised him that his Federal Employee Health Benefits coverage with Blue Cross and Blue Shield (BCBS) would transfer with him. From the time of his transfer until Spring 2005, all of his health insurance claims with BCBS were processed and allowed. There is no question or dispute that during this period Petitioner was receiving full health insurance benefits from BCBS. However, while BCBS continued to cover Petitioner's medical claims, SSA did not deduct health insurance benefit premiums from his pay. The error was finally noticed in Spring 2005 and the overpayments were discovered. First, Petitioner was notified of the smaller overpayment in April. In August, after SSA completed a manual audit of his payroll records for the entire time of his SSA employment, it discovered the additional overpayment of $13, 454.33. SSA notified Petitioner of his overpayment and advised him that he had a right to an administrative hearing to dispute the existence or the amount of the debt. He was further advised that the hearing request should indicate the reasons why the debt is disputed and should be accompanied by any necessary supporting documentation and evidence. Petitioner filed a timely hearing request.

Petitioner concedes that, if in fact no deductions were taken from his pay during his employment at SSA, then "the actual amount of the overpayment probably is correct."

Petitioner argues, however, that he was unaware that no deductions were being taken from his salary for his share of his health benefits insurance premiums; nothing on his Leave and Earnings Statement (LES) indicated no deduction was being taken; no line item appeared under deductions for Health Benefits. He was therefore unaware that no deductions were being made. He claims that he should not be responsible for these premiums; rather the responsibility should lie with the VA, SSA or BCBS, whoever is responsible for the administrative error.

Findings and Conclusions

My sole review function is to determine whether there is a valid debt that SSA may collect from Petitioner. There is no question that during this entire period, Petitioner received the benefits of health insurance with BCBS even though he did not contribute his share of the payment for them. Petitioner does not question that he was required to pay them; he merely contends that since he was not responsible for the error, he should not now be required to repay the amount expended on his behalf.

I have reviewed the records and find that there is no question that the audit of Petitioner's payroll records indicates that for the period in question no deductions for the health benefit premiums were deducted from Petitioner's salary. See Petitioner's submission dated November 13, 2006, at 23-30. Petitioner has not provided any evidence to suggest that the amounts determined by the manual audit to be owed by Petitioner were incorrect for any of the referenced pay periods. Nor has he shown that his health insurance coverage was in any way affected during this period.

The burden is on Petitioner here to show that the debt is invalid or that the amount is incorrect. Petitioner has done neither. While it is true that SSA made an administrative error, that error did not excuse Petitioner from a concurrent responsibility to check his LES each pay period to determine if the LES was correct. Clearly, Petitioner was in a position to know or he should have known that an error occurred. All federal employees receive an LES each pay period. These statements always show what items are being deducted from an employee's gross salary and in what amount. Typically, the statement would show under Deductions the following categories or types of deductions: Retirement, Medicare, Federal Tax, State Tax, Federal Employees Life Insurance (if an employee has opted for this), and Health Benefits (usually with the Insurance Carrier's Benefit Code which identifies the company and the option chosen) and the amount taken out that pay period and for the year to date for each of those categories/types. Moreover, Petitioner did not provide copies of any of his statements. Therefore, I cannot assume that his LES statements were unusual or varied from any other LES; if they were, then it was his responsibility to provide any necessary supporting documentation that showed otherwise. It is common knowledge and part of almost every new employee training to inform employees to review their LES for accuracy. ⁽³⁾

Here, Petitioner is an Administrative Law Judge with years of federal employment. He should know the importance of checking the accuracy of the LES each pay period and the necessity of reporting and following up on any problems or mistakes as mistakes do happen. Moreover, health benefit premiums are not static; they change each year. I find it incredible that an employee would not check at least at the start of every pay year to make sure the correct amount of premiums were being withheld. An even cursory review of the LES statement each pay period should have alerted Petitioner that there was a problem since he claims it did not indicate Health Benefit Premiums as a category of deduction from his gross salary. He also knows or should know that he cannot claim the benefit of the health insurance while at the same time claiming that because he was ignorant of the mistake he should not have to pay.

Therefore, I conclude that Petitioner has not rebutted SSA's determination of an overpayment debt of $13,454.33. The debt is valid and owed to SSA.

Carolyn Cozad Hughes

Administrative Law Judge

1. Petitioner also was overpaid $1282.26 in salary because he did not pay his share of health benefit premium payments due for the ninth pay period of 2004 through the eighth pay period of 2005. He repaid this amount through biweekly payroll deductions. Besides his request for hearing, Petitioner filed a request for a waiver of both debts in the amount of $14,736.59. SSA denied his waiver request by final agency action on September 29, 2006.

2. Through a written agreement with SSA, the Departmental Appeals Boards hears SSA debt collection cases of SSA employees. See also 45 C.F.R. � 30.15; 20 C.F.R. � 422.317.

3. The following is taken from a typical employee training handbook:

You will receive an Earnings and Leave Statement (ELS) every pay period at your office. The ELS is a detailed description of your current and year-to-date wages and mandatory and voluntary deductions. You should review your ELS every pay period so you know what has transpired with your pay.

It is a good idea to save your ELS's. Take a few minutes to review them to ensure everything is accurate. If you believe something is incorrect, check with your timekeeper, Personnel Generalist, Personnel Assistant, or the payroll liaison.

NIH Training Handbook. Similarly, a U.S. Comptroller decision stated that an employee is not without fault when an employee has records, such as earning and leave statements that, if reviewed, would indicate a mistake and the employee fails to review those records for accuracy or otherwise fails to take corrective action. Simon B. Guedea, B-189385 (August 10, 1977).